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Today, PennPIRG announced that it will urge students and families to call Senator Casey in support of the Student Aid and Fiscal Responsibility Act (SAFRA). In response to a multi-million dollar lobbying campaign by the student loan industry, some Senators are opposing SAFRA, a common-sense plan that would cut government waste, make college more affordable for hundreds of thousands of students, invest in our colleges, and expand our economy.
In Pennsylvania, college students graduate with an average of $23,300 in student loan debt. Meanwhile, lenders and banks receive roughly $9 billion in subsidies from the federal government each year to handle federal loans. To make college more affordable, PennPIRG and other reformers are backing SAFRA, which would cut those subsidies and spend the funds to increase and expand the federal Pell grant program. This year, enrollment soared on campuses in PA and elsewhere, causing a shortfall in the Pell grant program, which SAFRA would help make up.
Senator Casey suggests he is worried about SAFRA's impact on the deficit, and has backed away from including SAFRA in a budget maneuver that congressional leaders are considering that would also move health care. PennPIRG director Megan DeSmedt pointed out that switching from the FFEL student loan program, which subsidizes banks, to the more efficient direct lending program, will reduce, not increase, the deficit. Whatever new investments are made in education, there is no sound rationale for continuing FFEL – a wasteful giveaway of taxpayer money to wealthy student loan companies.
“The price of heeding bank opposition to student loan reform is that 500,000 low and middle income students would lose their their Pell grants at the same time that state budget cuts have made tuition costs soar. Eight million students across the country and hundreds of thousands here in Pennsylvania would see their awards cut by 60%,” DeSmedt said.
She encouraged Pennsylvanians to give Senator Casey’s office a call at (202) 224-6324. For more information, visit www.pennpirg.org.
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